Last Updated:December 18 @ 07:51 am

Kudlow: John Roberts Is a Super-taxer

By Lawrence Kudlow

In the hours following the Supreme Court's decision to ratify Obamacare, Romney got $4.6 million in donations from 47,000 individuals. The tide is with him. The Supremes are a game-changer.

But Romney has to make the case. He needs to link the anemic jobs and economic situation to the Obamacare tax, spend and regulate fiscal drag. And he has to add to that mix the dangers to our freedoms embodied in Justice John Roberts' expansion of the power to tax our personal behavior.

Scott Rasmussen says the idea of Obamacare repeal has held steady at around 54 percent ever since its passage in March 2010. This reveals the dynamic political opportunity that Romney has. Again, it's a three-pronged attack: the anemic economy, the Obamacare costs that are stifling the economy and the John Roberts expanded power of taxation that will bring us more mandates, more entitlements and less personal freedom, all of which will further cripple the economy.

One way of looking at Roberts' slight-of-hand decision to vote in favor of Obamacare is that a tax is a tax is a tax. As a non-lawyer, I see the Roberts vote as a massive expansion of federal government taxing power. Just what we don't need.

Supply-siders like myself argue that when you tax something, you get less of it. With Roberts throwing in with the liberals on the court to expand federal tax powers, we now face the massive threat of ultra-slow economic growth in the U.S. for years to come.

The Roberts court has served up a "tax mandate" that is more powerful than the still-limited Commerce Clause regulatory mandate. Roberts has created a huge new loophole. Instead of new purchase mandates, we'll have new purchase tax mandates.

This expanded tax power could force me to eat broccoli if the government so chooses, or make me put solar panels on my home. Gov. Bobby Jindal now worries about the people who "refuse to eat tofu or refuse to drive a Chevy Volt." Not because of the Commerce Clause, but because of the new tax-mandate clause. You'll be taxed heavily if you don't do what the government wants you to do.

And don't we have enough taxes already in this country? And what about the tax threats that are coming down the road?

Repealing the Bush tax cuts and adding on the Obamacare tax hikes will produce (SET ITAL) outrageous (END ITAL) marginal tax rates of roughly 45 percent for successful earners, dividend investors and small-business owners. In other words, European-style taxes, which suggests anemic European-style growth.

Americans for Tax Reform estimates that Obamacare contains 20 new or higher taxes on American families and small businesses. Investor's Business Daily says this comes to a $675 billion tax hike over the next decade. Steve Moore of The Wall Street Journal editorial board cites Congressional Budget Office estimates that roughly 8 million (or 76 percent of) middle-class taxpayers earning less than $120,000 a year will shoulder the new Obamacare tax mandate authorized by Roberts.

And this whole panoply of Obamacare taxes is already one big drag on the economy. Just in recent days, revised gross domestic product came in at 1.9 percent, and real consumer spending was essentially flat. Job growth has slowed markedly, as have new factory orders. Economists on Wall Street are looking for only 2 percent growth this year. The Fed is so worried about the economy it might launch another counterproductive quantitative easing.

Meanwhile, health care premiums are going up, not down. Mandated one-size-fits-all health services and insurance will incentivize businesses to pay the fine and push employees into the state exchange systems. And this will drive up the subsidized entitlement even more.

The CBO now estimates that Obamacare spending will hit $1.8 trillion over the next 10 years. That's a number that started out at only half as much. But that's what happens when you install European-style entitlements. You threaten to bankrupt the nation's finances. Or you threaten to literally tax us into perpetual subpar growth and high unemployment.

And that's the case Romney has to make. But he has to hammer away, day by day. He needs to make these points if we're to end the malaise.

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4 Comments

  1. inluminatuoComment by inluminatuo
    July 2, 2012 @ 10:24 am

    The only good thing that will come out of the subseqent upcoming decade of overtaxed slow growth that the Democrat Liberals have designed for us, is that it will inhibit the government monster’s ability to grow commensurately and it will bide us some time before the corrective pain of hunger wises up the people of America to finally throw the bums out.

    The only thing Roberts has accomplished is to take the swinging spot light off the swinging Liberal propensities of a Justice Kennedy to place himself in the spotlight for his 15 minutes of Judicial fame. The faces of the actors change, but the comedy remains the same.

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  2. joelinpdxComment by joelinpdx
    July 2, 2012 @ 1:05 pm

    But the people don’t like higher taxes and if the Obozocare decision does one thing it’s to force the taxers to admit they are levying taxes. Why do you think Obozo has argued so adamantly that Obozocare isn’t a tax? Now they are forced to admit it was a tax from the beginning and, if anything, that 54 percent of people who dislike Obozocare will rise.

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    • cxComment by genesal
      July 2, 2012 @ 1:12 pm

      SCOTUS didn’t say they had to label a mandate as a tax. Congress can lie and pass what ever they want, call it what they want and the people will be fooled again, being stuck with a tax. In other words ‘Buyer Beware’.

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  3. vthommassonComment by vthommasson
    July 2, 2012 @ 7:39 pm

    The administration is left with the same problem they started with. How do you charge a tax on a non-activity or a non-purchase?

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